EUR/AUD’s fall from 1.6765 extended to as low as 1.5887 after brief interim recovery. Initial bias remains on the downside this week. Sustained break of 61.8% retracement of 1.5346 to 1.6765 at 1.5888 will pave the way to 1.5346 key support level. On the upside, break of 1.6154 resistance is needed to indicate completion of the decline from 1.6765. Otherwise, further fall will remain in favor even in case of recovery.
In the bigger picture, the failure to sustain above 1.6587 key resistance (2015 high), argues that up trend from 1.1602 (2012 low), is not ready to resume yet. But still, as long as 1.5346 support holds, outlook will remain bullish. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal, with bearish divergence condition in weekly MACD, and turn outlook bearish.
In the longer term picture, the rise from 1.1602 long term bottom (2012 low) is still in progress. Break of 61.8% retracement of 2.1127 to 1.1602 at 1.7488 will pave the way to 100% projection of 1.1602 to 1.6587 from 1.3624 at 1.8069. And this will remain the favored case as long as 1.5346 remains intact.